Illustrations Part 1

Exercises – 1 st part Type of economic events (transactions) 1. Ext ernal – between business e ntity and its environment. 2. Inte rnal – ev ent o ccur ring ent irely wit in te business. *no. 3 and no. 6 are not recorded since it cannot be quantified in terms of money. ! busines s entity w eter it w as organi"e d under sole proprietorsip# partnersip or corporation# it may engage into $ diff. classification of business enterprise according to nature of operation. 1. %ervice – pro vid ing service 2. &erc andisi ng – buy and sell of g ood s $. &an ufac turin g – c onv ersio n o f ra w materials to finised goods. 1. ' 2. E $. . * +. ! ,sers of accounting information 1. In te rn al us er s 2. Ext er nal users - wners - /reditors - 'overnment agencies - /ustomers - 0abor unionsemployees M.A. Perez

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Transcript of Illustrations Part 1

Exercises 1st part

Type of economic events (transactions)

1. External between business entity and its environment.2. Internal event occurring entirely within the business.

*no. 3 and no. 6 are not recorded since it cannot be quantified in terms of money.

A business entity whether it was organized under sole proprietorship, partnership or corporation, it may engage into 3 diff. classification of business enterprise according to nature of operation.

1. Service providing service2. Merchandising buy and sell of goods3. Manufacturing conversion of raw materials to finished goods.

1. G2. E3. B4. H5. A

Users of accounting information1. Internal users2. External users - Owners - Creditors- Government agencies - Customers - Labor unions/employees

1. Cost principle2. Materiality convention3. Business entity concept4. Accrual accounting and revenue recognition5. Stable monetary assumption

M.A. Perez